The charts have shown the market go downhill since it reached a peak of 8,118.44 in July. This trend was further bolstered by the fact that the market ended at 6,889.78 last Friday, which showed a weekly loss of 177.95 points or 2.52 percent.
The factors present in a weak market performance were again present in last week’s trading. Daily average value turnover was only P6.05 billion. This was 23.71 percent less than the year’s average of P7.93 billion and about 50 percent lower than the average value turnover that often reversed the market’s downward trends in recent times.
As sellers dominated buyers, all counters were down. Add to this, foreign investors continued to be net sellers while accounting for more than 50 percent of total market transactions.
As a result, the market slipped to negative 62.30 points or 0.90 percent for the year—an overcast situation many believe may not likely to clear up soon.
Forecasts
But, wait—Read these forecasts from the University of Asia and the Pacific’s (UA&P) senior economists.
In last week’s briefing entitled “Beyond the first 100 days: Unleashing RPotentials,” which coincided with UA&P’s 2016 year-end business economic briefing, the common refrain was—if the country had been doing good, “the best is yet to come.”
In a presentation made by Dr. Victor A. Abola entitled “A Change Has Come: Decoupling with Global Weakness,” he said the country is now on a path of high growth fueled by high domestic demand spurred by strong investments, rising consumer spending and sustained government spending. Domestic demand, accordingly, has been driving the country’s growth in the last five years.
Investments, which he called the “new desired economic driver,” have been growing in the double digits in “13 of the last 16 quarters.” This could explain why capital goods imports have been growing at the rate of 20 percent in the last 12 months (up to August).
Because foreign direct investment (FDI) has been strong, it is “likely to end in a new full year record,” too.
It will also be no surprise that government spending will dramatically increase. President Duterte has approved a total of P223.5 billion public-private partnership projects in three months compared to the P43.4 billion his predecessor, former President Benigno Aquino III, approved in three years.
Moreover, consumption has been found growing solidly at a fast rate of 7 percent. OFW remittances have also remained robust despite the low oil price regimen and ongoing trouble in the Middle East.
Lastly, poverty incidence has dropped dramatically, due also to the growing economy and the result of the conditional cash transfer program (CCT) launched by the previous administrations.
As a footnote, while Mr. Duterte did initially disagree with the concept of expanding the CCT program, he later on allocated a bigger budget for it.